India: Witness Not In The Country? High Court Orders Travel To Singapore!

  • Court appoints a commission to a foreign country to record the evidence of a witness;
  • Evidence recorded on commission in another country does not amount to a change in venue of arbitral proceedings;
  • Courts do not have power to review an order passed by an arbitral tribunal granting leave to apply to court for appointment of commissioner.

Introduction

The Bombay High Court ("Bombay High Court") recently in Stemcor (S.E.A.) Pte Limited and Anr. v. Mideast Integrated Steels Limited,1 addressed a critical issue on examination of witnesses, in case of them not being physically present at the seat of arbitration. In this case, one of the key witness of the Petitioners refused to visit India ostensibly due to certain regulatory enquiries pending against him as he feared prosecution. The Bombay High Court, under Section 27 of the Arbitration and Conciliation Act, 1996 ("Act"), appointed the Arbitrator as the Court Commissioner and directed the team of lawyers alongwith the Commissioner, to travel to Singapore for recording his evidence. A Letter of Request was also issued to the High Court of Singapore for issuance of directions on cross examination and transmitting witness testimony back to the Bombay High Court.

Facts

Disputes arose between the parties, Stemcor (SEA) Pte Limited and Moorgate Industries Pvt. Ltd ("Petitioners") and Mideast Integrated Steels Limited and Ors. ("Respondents") in 2004. The parties filed consent terms on June 14, 2016 ("Consent Order"). The Consent Order held:

"The said Agreements are/shall be governed by the laws of India. The seat and venue of arbitration shall be Mumbai. The courts at Mumbai shall have exclusive jurisdiction in relation to the arbitration".

During the arbitral proceedings, the Respondents examined four witnesses, including Mr. Mathew Scott. The Petitioner proposed to examine two witnesses, including Mr. Gerard Craggs a resident of Singapore, the Managing Director of Petitioner No. 1. However, the Petitioners could not carry out the cross-examination of Mr. Craggs as he refused to travel to Mumbai.

The Petitioners filed an application under Section 19 of the Act for directing the recording of Mr. Craggs' evidence through video conferencing. The Respondents opposed the application. The Arbitrator allowed the application and held that the cross examination would be conducted in Singapore at the Petitioners' cost. However, the Arbitrator subsequently recalled this order and directed Mr. Craggs' to be present in Mumbai on January 29 and 30, 2018 for his cross examination.

The Petitioners filed an application before the Arbitrator to recall its previous order and allow recording of evidence of Mr. Craggs' through video conferencing. In the alternative, the Petitioners prayed that they be granted leave to apply to the court for issuing a commission to record the evidence of Mr. Craggs under Section 27 of the Act. The Arbitrator granted leave to the Petitioners, leading to the present petition.

Separately, during pendency of arbitration proceedings, the Respondents had previously requested the Arbitrator for leave to approach the court for appointing a commissioner to examine their witness, Mr. Mathew Stock, a resident of another country, as he was not able to visit India. The Arbitrator had then allowed the application for issuance of a commission on the condition that the Respondents shall bear all the related expenses. However, eventually, Mr. Mathew Stock visited India for the recording his evidence.

Some Issues:

  1. Whether ordering of a commission to Singapore for recording evidence of Mr. Craggs would effectively change the venue of arbitration and thus, against the terms of the Consent Order?
  2. Whether the Respondents had waived their right to object to an application filed under Section 27 of the Act, considering they had raised similar application before the Arbitrator in the past?
  3. Whether an order of an Arbitrator allowing an application to the Court under Section 27 of the Act can be challenged before the Court?

Judgment

After hearing the parties, the Bombay High Court proceeded to appoint the Arbitrator as a Commissioner (subject to his approval) as well as issue a Letter of Request to the High Court in Singapore. A brief analysis on various points raised during arguments are as under:

Waiver by the Respondents

The Arbitrator granted liberty to the Respondents to file an application before the court under Section 27 of the Act seeking permission for recording evidence of Mr. Stock, if they were unable to procure his affidavit. The Respondents made an application for appointment of commission and issuance of a letter of request. Though that was granted, Mr. Stock eventually appeared before the Arbitrator in India. Further, in the case of Mr. Stock, the Respondents had not denied that: (i) an application for issuance of witness summons or for issuance of a commission or a letter of request was without jurisdiction; (ii) the Arbitrator's order granting liberty to take assistance of the court was without jurisdiction. Therefore, Respondents had sought and been granted such order in the past, had effectively waived their rights to object to appointment of commission for recording evidence on ground of the same amounting to change in venue.

Taking evidence in Singapore does not amount to a change in venue

The Bombay High Court considered whether taking evidence in Singapore would amount to a change in venue under Section 20 of the Act as the Consent Order records that seat and venue of arbitration shall be Mumbai.

Relying on the case of Vithaldas Damodar v. Lakhmidas Harjiwan,2 and International Planned Parenthood Federation v. Madhu Bala Nath3 the Bombay High Court held that the provisions of Order XXVI Rules 7 and 8 are relevant in this context clarifying that evidence recorded on commission has to be read as evidence before the court before whom it is considered as evidence.

Therefore, when the evidence recorded by the commission is read before the Arbitrator in Mumbai, the evidence would be considered to have been tendered in Mumbai. Thus, there is no change in venue if the evidence is recorded on commission in Singapore.

Validity of the Arbitrator's Order

The Respondents questioned the validity of the Arbitrator's order to allow Petitioners to approach the court under Section 27 of the Act. The Bombay High Court held that the purpose of an application under Section 27 is to facilitate and expedite the arbitral proceedings by taking assistance of the court in production of documents and witnesses, which is necessary for effective adjudication of a dispute.

Under Section 5 of the Act, there is a clear bar on courts to intervene in arbitral proceedings unless expressly specified. Since the Act does not specify an intervention, the Bombay High Court held that at the stage of hearing an application under Section 27, it cannot adjudicate on the correctness and validity of the Arbitrator's order. In the event, the Respondents are aggrieved by the award passed, they can challenge the order passed by the Arbitrator granting permission to seek assistance of the court under Section 27, along with the award, under Section 34 of the Act.

Reasons for Ordering Commission

The Bombay High Court held that Section 27(6) of the Act clarifies that commissions and summons can be issued for the examination of witnesses and production of documents. The court has the power to order a commission for examination of witnesses. Further, the Arbitrator had held that if Mr. Craggs was unable to visit Mumbai due to his perception of the likelihood of detention or impounding of passport, the Petitioners would be denied the benefit of his evidence. Considering Mr. Craggs was the officer/Managing Director of the Petitioner, his evidence was relevant and material to the proceedings and could not be ignored.

The Bombay High Court held that it was beyond reasonable doubt that the evidence of Mr. Craggs was material and relevant to the arbitral proceedings. Relying on a Supreme Court ruling,4 the Bombay High Court held that recording of evidence by a commission is more authentic than evidence recorded through video conferencing. The commission would be the agent of the court for the purposes of recording evidence and therefore ordered a commission to Singapore to examine the evidence of Mr. Craggs.

Procedure for Ordering Commission

The Bombay High Court provided directions under Section 27 and for issuance of a Letter of Request to the High Court in Singapore.

  • The Arbitrator (subject to his confirmation) to be the court commissioner for recording the examination of Mr. Craggs in Singapore;
  • The Prothonotary and Senior Master of the Bombay High Court will issue a Letter of Request to the High Court of Singapore to issue directions for the examination of Mr. Craggs pursuant to the Supreme Court of Judicature Act. The Singapore High Court was requested to transmit the testimony of Mr. Craggs along with a report, if any, to the Bombay High Court.
  • If the Arbitrator declines to act as commissioner, the Letter of Request will include a request to the Singapore High Court to appoint a fit and proper person as commissioner.
  • All the costs of recording the evidence of Mr. Craggs will be borne by the Petitioners.

Analysis

The Bombay High Court has adopted a pro-arbitration approach by facilitating the recording of evidence of the witness in Singapore and overcoming procedural hurdles.

The law allows the Arbitrator to grant permission to seek assistance of the court for production of witnesses and documents. The Bombay High Court in its earlier ruling in Montana Developers Pvt. Ltd vs Aditya Developers5, had clarified that courts are not empowered to adjudicate upon the validity of an order passed by an arbitral tribunal under Section 27 of the Act. The court cannot go into the merits of such an application and/or the order itself. The nature of power under Section 27 is limited to executing the request of the tribunal and court cannot second guess the admissibility, relevance, materiality, and weight of any evidence. This also ensures that parties do not have a second bite at the apple (before the Court) and the orders of the Tribunal are adhered to.

The Bombay High Court placed reliance on recording of evidence by commission than video-conferencing, despite advantages associated. Video-conferencing may be cost effective but may possibly prevent capturing demeanor and body language of parties during cross-examination. While deciding whether video conferencing should be permitted or commission to be appointed, courts are likely to weigh the unavailability of the witness, the prejudice to the cross-examining party, and the importance of the testimony. It should be kept in mind that various courts across the country have issued guidelines for adoption of technology and factors to be considered for permitting video-conferencing.

However, since a one size fits all approach cannot be the norm, it remains to be seen how courts in the future will exercise such powers in different factual scenarios especially in situations where parties may have financial constraints.

Footnotes

1 Arbitration Petition No. 332 of 2018.

2 (1942) 44 BOM LR 609.

3 FAO (OS) No. 416 of 2015.

4 State of Maharashtra v. Praful Desai, AIR 2003 (4) SCC 601.

5 Arbitration Petition (Lodging) No. 680 v 2016

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Payel Chatterjee
Sahil Kanuga
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
 
Email Address
Company Name
Password
Confirm Password
Position
Industry
Mondaq Newsalert
Select Topics
Select Regions
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions